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As we matriculate through yet another “Chamber of Commerce” winter here in paradise, many are far more concerned with issues outside of their social schedule.

Investors have been taken to new levels with their investments, particularly when it comes to the markets returns and the euphoria that goes with all that is the recent run up in prices that has so affectionately been dubbed “The Trump Effect.”

Many investors, and certainly retired investors, have become weary of the markets ups and downs, especially when to comes to real rates of return over the long term. However, with each passing day, investors sail further into uncharted waters with the length and levels of this current market run.

It was merely six months ago that investor sentiment was waning in the anticipation of an election year. Confidence had dipped and yet at the same time, the volatility of the markets as far as trading volume and swings in value had also slowly begun to subside. Perhaps investors had become skeptical as to how far the markets can go from here. Fast forward six months to the Trump era in the White House and we can see a drastic change in both sentiment and market levels. Because investors often choose to have selective memories when it comes to finances, let’s review the numbers.

In January of 2015, The Dow reached the 18,000 level. As of November of 2016, The Dow was still right around the 18,000 level for a nearly two year run with flat returns, minus a couple short term drops to the 15,500 level. As of this week, the Dow has charged even higher approaching the 21,000 level. This recent run up equates to a roughly fifteen percent increase in value in less n 90 days. Yes, the numbers certainly do tell the story…in this case they tell a story of unprecedented market gains on the heels of an also unprecedented nine year bull run, yet again stacked upon another unprecedented roughly 150 percent increase in values since the last crash of 2009. Yes the numbers do indeed tell quite the story.

For more perspective, it is noteworthy that the Dow touched 12,000 for the first time back in 2000. Current levels reveal an increase of approximately 70 percent since the year 2000. This equates to an annualized return of roughly 4.1 percent per year since 2000. Now, clearly these numbers can be both mystifying while at the same time misleading for many that simply sit back and await the next monthly statement. Far too many investors gage their investing success on a month by month basis versus looking at the big picture. Here is where a closer look at the numbers can tell a story of moderate single digit returns during the last now 17 years. Sorry, not only do the numbers tell a story … they never lie.

As investors attempt to digest both where are today and how we got here, many retired investors are far more concerned with where we may be headed with each passing day taking us closer and closer to the day of reckoning. Many believe that, the higher we go, the further we may fall. As this has yet to come to fruition, many have begun to capture and securer their gains. For some, this simply requires liquidating both stocks and bonds in order to capture their gains from the last eight years. For others this process implements the use of the insured index strategy which allows investors to capture a percentage of the markets annual returns while avoiding any and all market based losses. The trade-off here is that the numbers tell us a story of muted returns as opposed to capturing 100 percent of the market gains.

However, they also tell the story that it is not as important how much we make in the up years, rather it is critical as to how much we keep and do not give back in the down years. Clearly, as we inch higher and higher, the addition of non-correlated assets such Managed Futures certainly lead to the life of a SWAN, Sleep Well At Night.

William F. Hague is a managing partner of Hague Wealth Management; 239-389-1999 or WFHague@earthlink.net. The opinions and observations stated above are those of the columnist.

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